John McCain on Free Trade

Republican nominee for President; Senior Senator (AZ)

Free trade with Colombia is something that’s a no-brainer

McCAIN: Sen. Obama said he would unilaterally renegotiate NAFTA.

OBAMA: For far too long, certainly during the course of the Bush administration with the support of Sen. McCain, the attitude has been that any trade agreement is a good trade agreement.
And NAFTA did not have enforceable labor agreements and environmental agreements.

McCAIN: I am a free trader. Let me give you another example of a free trade agreement that Sen. Obama opposes. Right now, goods and products that we send to
Colombia, which is our largest agricultural importer of our products, because of previous agreements, their goods and products come into our country for free. So Sen. Obama opposes the Colombia Free Trade Agreement. The same country that’s helping
us try to stop the flow of drugs into our country that’s killing young Americans. Free trade with Colombia is something that’s a no-brainer. But maybe you ought to travel down there and visit them and maybe you could understand it a lot better.

When have Americans ever been afraid of foreign competition?

The global economy is here to stay. We cannot build walls to foreign competition, and why should we want to. When have Americans ever been afraid of competition? America is the biggest exporter, importer, producer, saver, investor, manufacturer, and
innovator in the world. Americans don’t run from the challenge of a global economy. We are the world’s leaders, and leaders don’t fear change, hide from challenges, pine for the past and dread the future.

That’s why I reject the false virtues of
economic isolationism. Any confident, competent government should embrace competition--it makes us stronger--not hide from our competitors and cheat our consumers and workers. We can compete and win, as we always have, or we can be left behind.
Lowering barriers to trade creates more and better jobs, and higher wages. It keeps inflation under control and interest rates low. It makes goods more affordable for low and middle income consumers. Protectionism threatens all those benefits.

Globalization is an opportunity--reduce barriers to trade

Lowering Barriers to Trade: John McCain believes that globalization is an opportunity for American workers today and in the future. The
U.S. should engage in multilateral, regional and bilateral efforts to reduce barriers to trade, level the global playing field and build effective enforcement of global trading rules.
Competitive American Workers: John McCain understands that globalization will not automatically benefit every American.
We must prepare the next generation of workers by making American education worthy of the promise we make to our children and ourselves. We must be a nation committed to competitiveness and opportunity.

Consider subsidies a mistake, and oppose them

We should make sure that every nation respects human rights, and we should advocate that and try to enforce it. I will open every market in the world to Iowa’s agricultural products, and eliminate subsidies on ethanol and other agricultural products.
Subsidies are a mistake, and I don’t believe that anybody can say that they’re a fiscal conservative and yet support subsidies which distort markets & destroy our ability to compete in the world, as well as our ability to get cheaper products into the US

Source: 2007 Des Moines Register Republican Debate
, Dec 12, 2007

Every time US went protectionist, we paid heavy price

I’m a student of history. Every time the United States has become protectionist and listened to the siren song that you’re hearing partially on this stage tonight, we’ve paid a very heavy price. The Smoot-Hawley
Tariff Acts in the 1930s were direct contributors to World War II. It sounds like a lot of fun to bash China and others, but free trade has been the engine of our economy. Free trade should be the continuing principle that guides this nation’s economy.

Source: 2007 Republican debate in Dearborn, Michigan
, Oct 9, 2007

Supports ethanol, but by exporting, not by subsidies

I have a glass of ethanol every morning before breakfast. (Audience laughter.) But I still don’t support the subsidies, and I don’t think we need them. And I think we ought to have sugarcane-based ethanol into this country, and I don’t think that
subsidies are the answer, because I’ll open up every foreign market to our agricultural products, who are the most productive & best & most effective agriculture in the world. All this bashing of free trade--Ronald Reagan must be spinning in his grave.

Source: 2007 Republican debate in Dearborn, Michigan
, Oct 9, 2007

No environmental provisions in trade agreements

Q: Do you support the North American Free Trade Agreement (NAFTA)?

A: Yes.

Q: Do you support the General Agreement on Tariffs and Trade (GATT)?

A: Yes.

Q: Do you support continued U.S. membership in the World Trade Organization (WTO)?

A: Yes.

Q: Do you support the trade embargo against Cuba?

A: Yes.

Q: Should trade agreements include provisions to address environmental concerns and to protect workers’ rights?

Supports opening border to Mexican trucks

McCain [made an effort] to block a Democratic amendment that would delay opening the border with Mexico to Mexican trucks, under the North American Free Trade Agreement (NAFTA), for at least another two years. McCain got into the issue because he’s a
strong believer in free trade, because Mexico borders on Arizona, and because he has a principled objection to putting such legislation on an appropriations bill. He thinks this only increases the appropriators’ already outsized power.
McCain was heavily outnumbered on the issue, but he doesn’t mind fighting when he thinks a principle is involved.

The Democrats argued that the issue was safety, while opponents pointed out that the Teamsters were behind the
Democrats on this matter. McCain’s position put him on the side of the administration, which he didn’t mind at all. He looks for such opportunities. Moreover, the co-sponsor of his effort was Phil Gramm, his supposed nemesis.

Against foreign sales corporations (offshore tax breaks)

Speaking in Washington state just before their primary, McCain said he opposed a tax provision that has saved some of that state’s largest employers, including Boeing & Microsoft, hundreds of millions each year.

McCain was asked if he supported a
recent ruling by the WTO to eliminate foreign sales corporations, the off-shore subsidiaries that many US companies set up to channel overseas sales, avoiding $4 billion on US taxes & export duties.

McCain took the side of the WTO, saying that that
he opposed the corporate tax shelter.“We’re spending millions of dollars to help McDonald’s sell hamburgers overseas,” he said.

McCain said the protections are unnecessary. “We can compete with anybody in any market in the world because our products and
our workers are the most productive,” he said. “The answer is not to subsidize with taxpayers’ dollars these major corporations. The answer is to say to every country, ‘Allow our products into your country and we’ll compete on a level playing field.’ ”

Source: New York Times, p. A10
, Feb 28, 2000

Substitute trade treaties for protectionism

Q: What will you do as president to help farmers get sufficient pay for their work? A: The American farmer is the most productive and efficient farmer in the world.
He or she can compete anywhere in the world as long as we open the markets to those products.
Isolationism and protectionism doesn’t work. We should not subsidize ethanol or sugar or any other crop, because then that hurts the American consumer. But I will
lower the barriers to products coming into the US in return for any nation that will lower their barriers to US products, particularly our magnificent and wonderful agricultural products.

Admit China to WTO based on their concessions

China agreed to lower tariff rates to levels commensurate with the industrialized members of WTO instead of the higher levels employed by developing countries. This would have reduced tariffs on agricultural goods 40%. China’s entry into the WTO is in
our national interest. Their accession would bind China to WTO’s dispute resolution procedures. WTO rulings have overwhelmingly supported the US position in the past, to the great benefit of American businesses and families.

Free trade with any country except security risks

I don’t believe in walls. I believe in freedom. If I were President, I would negotiate a free trade agreement with almost any country willing to negotiate fairly with us. Only risks to the security of our vital interests or egregious offenses to our most
cherished political values should disqualify a nation from entering into a free trade agreement with us.

Source: Speech to National Press Club, 5/20/99
, May 20, 1999

Retaliatory protectionism is a “murder-suicide pact”

Yes, many American families will suffer from the inevitable dislocations caused by the imperatives of a global economy. But the answer to their suffering cannot be the adoption of policies that will sustain one industry by tariff or subsidy. Embracing
protectionism here to retaliate for it elsewhere is akin to a murder-suicide pact, and we should resist the temptation whether the product in question is bananas or sugar or steel.

Source: Speech to National Press Club, 5/20/99
, May 20, 1999

Chile in NAFTA is good, but Fast Track isn’t

The President has been forceful in evoking the image of a Western Hemisphere of free, independent nations pursuing mutual prosperity in a hemispheric free trade agreement. The President gave Chile and other countries in the hemisphere good reason to hope
that they would be our next free trade partners. But, in the end, asking Congress for fast track negotiating authority was too high a price to pay to realize this grand vision.

Source: Speech to National Press Club, 5/20/99
, May 20, 1999

China: Keep open trade & diplomacy; but keep eyes open

I have opposed efforts to revoke normal trading status between us or to freeze our diplomacy toward China. And in recent months the Chinese have cooperated with us more than usual on matters such as the Asian financial crisis and a little more than usual
on proliferation. But. we must also prepare for the other contingency, that China emerges as the primary threat to American interests and values. The latest spy incident proves [our vulnerability to this risk] beyond dispute.

Source: www.mccain2000.com/ “Position Papers” 4/30/99
, Apr 30, 1999

Mexico: balancing act between free trade & stopping drugs

[There are] dangers implicit in failing to properly monitor traffic crossing the Mexican border. Yet, Mexico is one of our largest trading partners, and it is in our best interest to maintain as open a border as possible. It is a careful balancing act.
[We should] ensure that we are doing everything we can to stem the flow of illegal drugs without impeding the flow of legitimate commerce. The key to finding that balance is procuring equipment to expeditiously scan incoming cargo.

NAFTA has had unambiguously positive impact on US

While the effects of the NAFTA are being closely monitored by supporters and critics of that pact alike, it has become clear that NAFTA represents an important component of our international economic policy, contributing to the creation of 300,000 new
American jobs since its passage. It will likely be several more years before its full impact can be determined. The results from the first five years, however, unambiguously demonstrate that the agreement has a net positive impact on the US economy.

Source: Senate statement, “Drug Free Borders”
, Mar 18, 1999

John McCain on Voting Record

Pro-NAFTA, pro-GATT, pro-MFN, pro-Fast Track

McCain supports the following statements regarding free trade:

Supports NAFTA, including broadening NAFTA to include other countries in the western hemisphere.

Supports GATT and the WTO.

Opposes imposing tariffs on products imported from
nations that maintain restrictive trade barriers on American products.

A nation’s human rights record should not affect its “most favored nation” trading status with the US.

Supports granting the President “fast-track” authority.

Source: 1998 National Political Awareness Test
, Jul 2, 1998

Voted YES on free trade agreement with Oman.

Vote on final passage of a bill to implement the United States-Oman Free Trade Agreement.

Opponents of the bill say to vote NAY because:

International trade can confer tremendous benefits on all of its participants. Unfortunately, the Oman Free Trade Agreement fails to live up to that potential.

In 2001, the US entered into a similar trade agreement with the country of Jordan. The agreement was heralded for its progressive labor standards. However, we have recently seen in Jordan instances of foreign workers forced into slave labor, stripped of their passports, denied their wages, and compelled to work for days without rest.

These incidents have been occurring in Jordan because Jordanian labor laws preclude protections for foreign workers. My fear in Oman is that they have far weaker labor standards, and that would lend itself to even worse conditions than in Jordan.

When our trade partners are held to different, less stringent standards, no one is better off.
When Omani firms can employ workers in substandard conditions, the Omani workers and American workers both lose. The playing field is not level.

Proponents of the bill say to vote YEA because:

The Oman Free Trade Agreement sends a very important message that the US strongly supports the economic development of moderate Middle Eastern nations. This is a vital message in the global war on terrorism.

Since the end of WWII, the US has accepted nonreciprocal trade concessions in order to further important Cold War and post-Cold War foreign policy objectives. Examples include offering Japan and Europe nonreciprocal access to American markets during the 1950s in order to strengthen the economies of our allies and prevent the spread of communism.

Oman is quickly running out of oil and, as a result, has launched a series of measures to reform its economy. This free-trade agreement immediately removes Oman's uniform 5% tariff on US goods.

Voted YES on establishing free trade between US & Singapore.

Vote to pass a bill that would put into effect a trade agreement between the US and Singapore. The trade agreement would reduce tariffs and trade barriers between the US and Singapore. The agreement would remove tariffs on goods and duties on textiles, and open markets for services The agreement would also establish intellectual property, environmental and labor standards.

Voted YES on establishing free trade between the US and Chile.

Vote to pass a bill that would put into effect a trade agreement between the US and Chile. The agreement would reduce tariffs and trade barriers between the US and Chile. The trade pact would decrease duties and tariffs on agricultural and textile products. It would also open markets for services. The trade pact would establish intellectual property safeguards and would call for enforcement of environmental and labor standards.

Voted YES on extending free trade to Andean nations.

HR3009 Fast Track Trade Authority bill: To extend the Andean Trade Preference Act, to grant additional trade benefits under that Act, and for other purposes. Vote to pass a bill that would enlarge duty-free status to particular products from Colombia, Bolivia, Peru, and Ecuador, renew the president's fast-track authority and reauthorize and increase a program to make accessible retraining and relocation assistance to U.S. workers hurt by trade agreements. It would also approve a five-year extension of Generalized System of Preferences and produce a refundable 70 percent tax credit for health insurance costs for displaced workers.

Voted NO on removing common goods from national security export rules.

Vote to provide the president the authority to control the export of sensitive dual-use items for national security purposes. The bill would eliminate restrictions on the export of technology that is readily available in foreign markets.

Voted YES on permanent normal trade relations with China.

Voted YES on expanding trade to the third world.

Vote to expand trade with more than 70 countries in Africa, Central America and the Caribbean. The countries would be required to meet certain eligibility requirements in protecting freedoms of expression and associatio

Voted YES on renewing 'fast track' presidential trade authority.

Vote to proceed to the bill which establishes negotiating objectives for trade agreements, and renews 'fast track' trade authority for the President, which allows Congress to adopt or to reject a proposed trade agreement, but not to amend it.

Voted NO on imposing trade sanctions on Japan for closed market.

Resolution supporting sanctions on Japanese products if car parts markets don't open up; and seeking sharp reductions in the trade imbalances in car sales and parts through elimination of restrictive Japanese market-closing practices.

Promote the Andean Free Trade Agreement.

McCain adopted the Republican Main Street Partnership agenda item:

After a month of debate the Senate passed a The Andean Free Trade Agreement (H.R. 3009) including language to grant the president trade promotion authority. With the unanimous support of all eight Republican Main Street Partnership Senators, H.R. 3009 passed 66 to 30. Included in the legislation is an expansion of Trade Adjustment Assistance (TAA) providing a tax credit for 70% of the cost of health insurance purchased individually after losing employment as a result of a trade agreement.
While the Senate maintained its pro-trade reputation by defeating amendments by Senator Kerry (MA) and Senator Byrd (WV) diluting Trade Promotion Authority, one amendment strongly opposed by Main Street remains in the bill. An amendment offered by Senator Dayton (MN) and Senator Craig (ID) would allow the Senate to remove from fast-track consideration any provision of an agreement that would limit US trade remedy laws. Main Street firmly believes that this negates Trade Promotion Authority entirely, and supports President Bush's veto threat should this language remain intact after a House/Senate conference.

The mission of the Cato Institute Center for Trade Policy Studies is to increase public understanding of the benefits of free trade and the costs of protectionism.

The Cato Trade Center focuses not only on U.S. protectionism, but also on trade barriers around the world. Cato scholars examine how the negotiation of multilateral, regional, and bilateral trade agreements can reduce trade barriers and provide institutional support for open markets. Not all trade agreements, however, lead to genuine liberalization. In this regard, Trade Center studies scrutinize whether purportedly market-opening accords actually seek to dictate marketplace results, or increase bureaucratic interference in the economy as a condition of market access.

Studies by Cato Trade Center scholars show that the United States is most effective in encouraging open markets abroad when it leads by example.
The relative openness and consequent strength of the U.S. economy already lend powerful support to the worldwide trend toward embracing open markets. Consistent adherence by the United States to free trade principles would give this trend even greater momentum. Thus, Cato scholars have found that unilateral liberalization supports rather than undermines productive trade negotiations.

Scholars at the Cato Trade Center aim at nothing less than changing the terms of the trade policy debate: away from the current mercantilist preoccupation with trade balances, and toward a recognition that open markets are their own reward.

The following ratings are based on the votes the organization considered most important; the numbers reflect the percentage of time the representative voted the organization's preferred position.

Sponsored bill for trade with post-Orange Revolution Ukraine.

OFFICIAL CONGRESSIONAL SUMMARY: To authorize the extension of nondiscriminatory treatment (normal trade relations treatment) to the products of Ukraine.

SPONSOR'S INTRODUCTORY REMARKS: Sen. McCAIN: The recent Orange Revolution in Ukraine marked a huge victory for the advancement of democracy in the world. The Ukrainian people made clear that they would not stand idle as a corrupt regime sought to deny them their democratic rights. Now that the people of Ukraine have seized control of their destiny, the US must stand ready to assist them as they do the hard work of consolidating democracy.

The purpose of the amendment is to terminate the Jackson-Vanik amendment, with respect to Ukraine. Beyond any benefits to our bilateral trading relationship, lifting Jackson-Vanik for Ukraine constitutes an important symbol of Ukraine's new democracy and its relationship with the US. Tomorrow, Ukrainian President
Yushchenko will address a joint session of Congress, an honor which we bestow on few foreign leaders. As we have the privilege of welcoming this true hero of democracy, I can think of no better gesture than terminating the anachronistic & inappropriate Jackson-Vanik restrictions on Ukraine.

EXCERPTS OF AMENDMENT:

Congress finds that Ukraine has--

made considerable progress toward respecting fundamental human rights

adopted administrative procedures that accord its citizens the right to emigrate, travel freely, and to return to their country without restriction; and

been found to be in full compliance with the freedom of emigration provisions in the Trade Act of 1974.

[Restrictions on trade] should no longer apply to Ukraine; and Congress proclaims the extension of nondiscriminatory treatment (normal trade relations treatment) to the products of that country.

LEGISLATIVE OUTCOME:Considered by Senate on 4/6/2005; never came to a vote.

Extend trade restrictions on Burma to promote democracy.

A joint resolution approving the renewal of import restrictions contained in the Burmese Freedom and Democracy Act of 2003. The original act sanctioned the ruling military junta, and recognized the National League of Democracy as the legitimate representative of the Burmese people.

Proponent's argument for bill:(Senators' opinions reported on politico.com) "We subsidize a handful of wealthy sugar growers at the expense of everybody in America," said Sen. Patrick Toomey (R-Pa.), whose home state boasts the chocolate giant, Hershey's. Sen. Heidi Heitkamp (D-N.D.), warned her colleagues against unraveling the commodity coalition behind the farm bill: "We forget that this is much bigger than a sugar program.
It's much bigger than any one single commodity. When you single out one commodity, you threaten the effectiveness of the overall farm bill."

Opponent's argument against bill:(Food and Business News, May 2013): Users claim the sugar program nearly doubles the price of sugar to US consumers and has resulted in lost jobs as some candy manufacturers have moved operations to other countries. Producers claim the program has resulted in more stable sugar supplies, provides a safety net for growers and that world prices are often lower because of subsidies in origin countries, which would put US growers at a disadvantage should import restrictions be lifted. Producers also note that US sugar prices have declined more than 50% from late 2011 highs. They also maintain that jobs have been lost or moved out of the US for reasons other than sugar prices, mainly labor and health care costs, noting that candy makers' profits have been strong in recent years.